Exhibit 10.1


  


MAGNEGAS SYSTEMS PURCHASE AGREEMENT


 


THIS MAGNEGAS SYSTEMS
PURCHASE AGREEMENT (this “Agreement”) is made as of this 30th day of December, 2016 (the “Effective
Date”) by and between MAGNEGAS CORPORATION, a Delaware corporation (“MagneGas”) and TALON
VENTURES & CONSULTING GMBH, a company constituted under the laws of Germany (“TALON”). MagneGas and
TALON are each referred to herein individually as a “Party,” and jointly as the “Parties.”


 


RECITALS


 


A.       MagneGas
is engaged in the business of developing and manufacturing gasification and sterilization equipment that operate with MagneGas’
proprietary technology to generate a proprietary gaseous fuel from certain waste products (the “MagneGas Fuel”).


 


B.       TALON
is a company doing business in Germany with access to a distribution network in Germany for potential marketing of MagneGas Fuel.


 


C.       MagneGas
and TALON have entered into that certain Letter of Intent dated as of August 22, 2016 (the “LOI”), providing
for the sale of the MagneGas Systems (as defined below) to TALON, together with certain cylinders and MagneGas regulators, for
the manufacture and distribution of MagneGas Fuel within a limited Territory (as defined below) and subject to the terms and conditions
described in the Licensing and Distribution Agreement (the “Distribution Agreement”) to be entered into between
MagneGas and TALON.


 


D.       As
a condition to the Distribution Agreement, MagneGas shall sell and TALON shall purchase the MagneGas Systems consisting of a MagneGas
gasification system and a MagneGas sterilization system meeting the specifications described herein.


 


E.       The
purpose of this Agreement is to set forth the terms and conditions upon which MagneGas will sell to TALON and TALON will purchase
the MagneGas Systems from MagneGas, and the respective duties, obligations, and responsibilities of each of the Parties.


 


F.        MagneGas
agrees that all services, warranties and obligations that are owed to TALONwill fully apply to all customers of TALON (or a respective
subsidiary) who have purchased MagneGas equipment (gasification units, sterilization units, periphery). All respective claims shall
be handled directly by MagneGas as manufacturer of the equipment.


 


NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally
bound, hereby agree as follows:


 






     


     


    

 


OPERATIVE TERMS AND CONDITIONS


 


1.       DEFINITIONS


 


In addition to any
other term defined elsewhere in this Agreement, the following terms shall have the respective meanings set forth below.


 


1.1       “Affiliate”
means any legal entity that is owned by, owns, or is under common Ownership with a party. "Ownership" means more than
50% of the voting interests of a Party, whether attained through stock or equity ownership or through a contractual arrangement.


 


1.2       “Commissioning”
shall mean the process of deeming a MagneGas System to be operational and successful in producing MagneGas within the specifications
for such system as set forth in this Agreement.


 


1.3       “Confidential
Information” shall have the meaning set forth in Section 12.1.


 


1.4       “Construction
Completion Deadline” shall have the meaning set forth in Section 4.4.


 


1.5       “Distribution
Agreement” shall have the meaning ascribed to that term in the recitals to this Agreement.


 


1.6       First
Installment” shall have the meaning set forth in Section 4.3.


 


1.7       “Force
Majeure Event” shall have the meaning set forth in Section 13.1.


 


1.8       “Gasifier”
shall have the meaning set forth in Section 1.8.


 


1.9       
“Initial Deposit” shall have the meaning set forth in Section 4.2.


 


1.10       “LOI”
shall have the meaning ascribed to this term in the recitals to this Agreement.


 


1.11       “Losses”
shall mean any and all damages, settlement amounts, assessments, fines, dues, penalties and other costs and expenses (including,
without limitation, court costs, interest and reasonable fees of attorneys, accountants and other experts) required to be paid
to third parties with respect to the claim, suit, or action in question by reason of any judgment, order, decree, stipulation or
injunction, or any settlement entered into in accordance with the provisions of this Agreement, together with all documented
out-of-pocket costs and expenses incurred in complying with any judgments, orders, decrees, stipulations and injunctions that arise
from or relate to such claim, suit, or action.


 


1.12       “MagneGas
Fuel” shall mean the fuel manufactured by a MagneGas Gasifier or Sterilization Unit as defined in the Recitals to this
Agreement.


 






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1.13       “MagneGas
Indemnified Party” shall have the meaning set forth in Section 11.2


 


1.14       “MagneGas
Regulators” shall mean the gauges used on the cylinders to regulate fuel flow.


 


1.15       “MagneGas
Systems” shall mean, jointly: (a) a 300KW stationary Gasification Unit manufactured by MagneGas based on technology which
gasifies liquid waste (the Vertical Gasification Gasifier) as specified on Exhibit A (the “Gasifier”),
and (b) a 100KW mobile sterilization Unit - as specified on Exhibit B (the “Sterilization Unit”).


 


1.16       “Mag2”
shall mean the MagneGas Fuel produced with a Gasifier from oil feedstock.


 


1.17       Notice
of Completion” shall have the meaning set forth in Section 4.4.


 


1.18       “Person”
or “person” shall mean any natural person, corporation, partnership, limited liability company, proprietorship,
association, trust, or other legal entity.


 


1.19       “Second
Installment” shall have the meaning set forth in Section 4.3.


 


1.20       “Sterilization
Unit” shall have the meaning set forth in Section 1.8.


 


1.21       “TALON
Indemnified Parties” shall have the meaning set forth in Section 11.1.


 


1.22       “Territory”
shall have the meaning ascribed to such term in the Distribution Agreement.”


 


1.23       Third
Installment” shall have the meaning set forth in Section 4.3.


 


2.       TERM.


 


2.1       Term.
The term of this Agreement will be effective from the date first set forth above and will remain in effect thereafter for one (1)
year from its effective date (the “Term”), provided that certain specified provisions of this Agreement shall
survive the termination of the Term, as indicated herein.


 


2.2       Renewal.
Any renewal terms of this Agreement that may be contemplated or necessary to allow additional time for a party’s performance
hereunder, if any, shall be negotiated by the Parties in their sole discretion.


 


3.       PURCHASE
AND SALE COMMITMENT


 


3.1       Sale
of MagneGas Systems. Subject to the terms and conditions herein, MagneGas will sell to TALON, and TALON will purchase from
MagneGas the following: (a) one Gasifier as identified on Exhibit A, (b) one Sterilization Unit as identified on
Exhibit B, (c) 250-150 cylinders full of Mag2 and (d) 50 MagneGas Regulators.


 






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3.2       Purchase
Price. The purchase price is (a) One Million Seven Hundred Fifty Thousand and NO/100 ($1,750,0000) for the Gasifier, (b) Eight
Hundred Thousand and No/100 Dollars ($800,000.00) for the Sterilization Unit, (c) Ninety-Five Thousand and NO/100 Dollars for the
Mag2 cylinders and (d) Five Thousand and No/100 Dollars ($5,000.00) for the MagneGas Regulators, for a combined total price of
Two Million Six Hundred Fifty Thousand and NO/100 Dollars) (the “Purchase Price”). The Purchase Price is F.O.B. MagneGas’
facility at Company Headquarters in Clearwater, Florida. The Purchase Price does not include any taxes or tariffs that may be imposed
on the transaction and be a cost to TALON.


 


3.3       Delivery
Commitment. Delivery of each MagneGas System will be accepted by TALON at MagneGas’s headquarters in Florida. TALON will
be responsible for arranging and paying for shipment to TALON’s facility in Germany or such other location where TALON will
choose to have the MagneGas Systems installed.


 


4.       DEPOSIT,
PAYMENT AND DELIVERY


 


4.1       Manner
of Payment: Currency. All payments for the Purchase Price of the MagneGas Systems or otherwise in connection therewith shall
be calculated and paid in U.S. Dollars and shall be paid by cash wire transfer to the following account in the name of MagneGas,
to be confirmed by email wire:


 


PNC Bank


 


		FBO:	MagneGas Corporation



11885 44th Street North


Clearwater, FL 33762


 


4.2       Initial
Deposit. A non-refundable deposit of Twenty-Five Thousand and no/100 U.S. Dollars (U.S. $25,000.00) has been paid by TALON
prior to this date and is hereby acknowledged (the “Initial Deposit”).


 


4.3       Payments.
Payment of One Million Three Hundred Fifty Thousand and NO/100 Dollars ($1,350,000) representing the 50% of the combined Purchase
Price of the MagneGas Systems plus the full price of the cylinders and regulators, less the Initial Deposit, shall be due to MagneGas
at its indicated account within 90 days following the execution of this Agreement, (the “First Installment”).
An additional Six Hundred Thirty-Seven Thousand and Five Hundred and NO/100 Dollars ($637,500) shall be paid to MagneGas within
15 business days of TALON’s receipt of written notice from MagneGas certifying that construction of the MagneGas Systems
is 75% complete (approximately 4 to 5 months from receipt of the First Installment (the “Second Installment”).
A third installment of Three Hundred Eighty-Two Thousand and Five Hundred and NO/100 Dollars ($382,500.00) (the “Third
Installment”) shall be due upon final completion of the MagneGas Systems and TALON’s accepting delivery thereof
at the factory (prior to shipping to TALON’s headquarters). A final installment of Two Hundred Fifty-Five Thousand and NO/100
Dollasrs ($255,000.00) is due upon delivery and installation, but in no event later than 20 business days after delivery. Time
is of the essence for any payments under this Agreement and payments hereunder shall be due not later than fiveteen (15) business
days of the due date stated herein. If a payment is not received fiveteen (15) business days after the due date, and is not disputed
in good faith by TALON, MagneGas shall provide written notice to TALON of the payment default, and if not cured within five (5)
business days after receipt of the written notice from MagneGas, it shall be considered a “Payment Breach” and
MagneGas shall not be obligated to commence construction or perform any other duties hereunder until the Payment Breach is cured.
In the event of a Payment Breach, the provisions of Sections 4.4 and 4.5 below shall cease to apply to this Agreement
and MagneGas’s sole obligation will be to complete performance hereunder upon receipt of the delinquent payment. In the event
of such a Payment Breach, this agreement will be deemed terminated and both parties acknowledge no recourse to either party.


 






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4.4       Completion
Deadline and Delivery. MagneGas shall have six (6) months from the payment of the First Installment (due as set forth in Section
3.3. above) to complete manufacture of the Gasifier (the “Construction Completion Deadline”). The MagneGas Systems
shall be deemed to have been completed when MagneGas notifies TALON that it has completed construction of each MagneGas Systems
and has tested it to produce MagneGas (a “Notice of Completion”).


 


4.5       Transfer
of Title/Shipment and Delivery. Title to the MagneGas Systems will transfer to TALON upon payment in full as required in Section
4.3 and upon MagneGas’s issuance of a Notice of Completion. Subject to the provisions of Section 4.6
below, freight, insurance, transportation and all other costs associated with shipment to Talon’s facility shall be borne
solely by TALON, and are not included in the Purchase Price, with MagneGas to be named as an additional insured party under any
insurance policy covering the MagneGas Systems while in transit. Title and risk of loss passes jointly to the Parties upon issuance
of the Notice of Completion and prior to shipment of the MagneGas Systems out of the MagneGas facilities.


 


4.6       Shipping
and Delivery Terms.


 


(i)       The
MagneGas Systems will be packed and shipped in a commercially reasonable manner mutually agreed by the parties, consistent with
industry standards, and in compliance with applicable law. MagneGas shall make all necessary arrangements for shipment of the MagneGas
Systems to the Talon facility, at Talon’s cost and expense, but MagneGas will not be held responsible for delays or costs
related to the shipment of the MagneGas Systems to Germany.


 


(ii)       TALON
will be responsible for bringing all utilities (water, electricity etc.) to the Talon facility where the MagneGas Systems will
be installed. TALON will be responsible for obtaining all required governmental permits and for preparing the site and surrounding
area in its entirety for the delivery and set up of the MagneGas Systems, including ensuring that the site meets the specifications
set forth on Exhibit B. MagneGas will be responsible for providing two technicians, at its sole expense, to assist with
the installation of the MagneGas Systems.


 






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4.7       Future
MagneGas Systems Purchases. MagneGas will sell additional MagneGas Systems (having the same specifications as the MagneGas
Systems purchased and sold hereunder, but subject to the variations specified in this paragraph) to Talon for installation anywhere
within the Territory, at the same price and on the same terms and conditions as set forth in this Agreement, except for price increases
which may be implemented by MagneGas solely to reflect increased cost of labor or materials. The MagneGas Systems to be sold hereby
are subject to changes in configuration or specifications as may be required by applicable regulations or safety standards or requirements
of the gasification system.


 


5.       ADDITIONAL
OBLIGATIONS OF THE PARTIES


 


5.1       Training.
At its sole expense, TALON shall send two of its representatives to MagneGas’s operations in [Tampa, FL] to train with
MagneGas technicians on the proper installation, operation, and maintenance of the Gasifiers (a “Train the Trainer Approach”)
[for a period of up to two (2) continuous weeks]. The cost of such training (except for the travel and lodging costs of the TALON
personnel) is included in the Purchase Price.


 


5.2Installation.
At its sole expense, MagneGas shall provide one technician to travel to the site of installation to assist for up to two weeks
with set up, installation and commissioning of the MagneGas Systems. Upon completion of such period, MagneGas will certify the
MagneGas Systems as operational in accordance with such standards as the parties have accepted as set forth on Exhibit D (the “Commissioning
Date”).


 


5.3       Service
and Repair. MagneGas shall provide a service kit containing the items identified on Exhibits A and B
with each MagneGas Systems delivered to the Talon facility, to support one (1) year of component failures, at no additional cost.


 


5.4       Service
and Repair. MagneGas shall provide a service kit containing the items identified on Exhibit A and B
with the MagneGas Systems delivered to the Facility, to support one (1) year of component failures, at no additional cost.


 


5.5       Compliance
with Law; Licenses and Approvals. Each Party shall comply in all material aspects with all laws, rules, regulations, and other
governmental requirements applicable to such Party’s performance or obligations under this Agreement, and shall obtain and
maintain all material governmental permits, licenses, and consents required in connection therewith. For clarification purposes,
Talon shall be responsible for all permits, licenses, consents and any other compliance relative to the operation of the MagneGas
Systems or use of MagneGas Fuel in the facility and in the Territory.


 


5.6       Independent
Contractors. Neither MagneGas nor TALON is, nor will be any of them be deemed to be, an agent, legal representative, joint
venturer, partner, or employee of the other for any purpose. For avoidance of doubt, neither MagneGas nor Talon will be entitled
to (a) enter into any contracts in the name of or on behalf of each other, (b) pledge the credit of any party other than itself
in any way or hold itself out as having authority to do so, or (c) make commitments or incur any charges or expenses for or in
the name of each other. As to each other, for purposes of this Agreement, MagneGas and TALON shall be independent contractors.


 






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5.7 Transfer
of Rights. TALON will have the right to transfer all rights resulting from this agreement to a subsidiary that will physically
execute the business. This subsidiary must be fully owned by TA or its shareholders.


 


5.8
Customer Claims. MagneGas agrees that all services, warranties and obligations that are owed to TALON will fully apply to
all customers of TALON (or a respective subsidiary) who have purchased MagneGas equipment (gasification units, sterilization units,
periphery). All respective claims shall be handled directly by MagneGas as manufacturer of the equipment.


 


6.       NO
LICENSE GRANTED. The purchase of the MagneGas Systems does not comprise a grant of any license
to TALON to use the name “MagneGas” or to sell or distribute any MagneGas Fuel. Any rights to such a license exist
and are granted only pursuant to the terms of the Distribution Agreement.


 


7.       TERMINATION


 


7.1       Termination
Without Cause. Notwithstanding anything stated herein, this Agreement may be terminated without cause only on the following
terms:


 


(i)       By
either Party, if a court of competent jurisdiction or governmental authority, regulatory, or administrative agency or commission
shall have enacted any law, statute, rule, or regulation, or issued any final and non-appealable order or decree that permanently
restrains, enjoins, or otherwise prohibits either Party from substantially performing under this Agreement; or


 


(ii)       By
either party due to the failure of successful testing of the completed MagneGas Systems.


 


7.2       Termination
For Cause. This Agreement may be terminated for cause on the following terms:


 


(i)       by
either Party if the other Party breaches or fails to comply with any material term, condition, or obligation required to be performed
or complied with by such other Party under this Agreement, and such material breach or failure is not cured within forty-five (45)
days following written notice thereof by the terminating Party;


 






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(ii)       
by either Party if the other Party (a) institutes any insolvency, receivership, or bankruptcy proceedings, or any other proceedings
for the settlement of its debts, (b) has any such proceedings instituted against it, which proceedings are not dismissed or otherwise
resolved in its favor within one hundred and twenty (120) days thereafter, (c) makes a general assignment for the benefit of its
creditors, or (d) is dissolved or permanently ceases to conduct business in the ordinary course; or


 


(iii)       By
MagneGas in the event of a Payment Breach by TALON.


 


7.3       Rights
and Obligations on Expiration or Termination.


 


(i)       In
the event of a Termination for Cause, the terminating Party may also be entitled to damages subject to the limitations of Article
10 and this Section 7.3. To the extent termination is in connection with a Payment Breach, MagneGas may,
at its option, make demand for the sums due and owing and shall retain the Initial Deposit as liquidated damages.


 


(ii)       In
the event of a Termination Without Cause under Section 7.1(i) due to MagneGas’s inability to perform, MagneGas shall promptly
refund all amounts paid it by TALON under this Agreement (subject to retention of the Initial Deposit which is non-refundable).


 


7.4       Survival.
All of the respective obligations, representations and disclaimers of the Parties set forth in this Agreement shall survive the
execution and delivery of this Agreement and the delivery of the MagneGas Systems to the Facility.


 


		8.	REPRESENTATIONS AND WARRANTIES; DISCLAIMER OF ADDITIONAL WARRANTIES; COVENANTS BY TALON



 


8.1       By
Both Parties. Each Party represents and warrants to the other Party that (a) it has the requisite corporate power and authority
to enter into and perform its obligations under this Agreement, (b) it is not a party to any agreement or understanding, and knows
of no law or regulation, that would prohibit it from entering into and performing its obligations under this Agreement, or that
would conflict with this Agreement, and (c) when executed and delivered by it, this Agreement will constitute a legal, valid and
binding obligation of it, enforceable against it in accordance with the terms hereof.


 


8.2       Additional
Warranties of MagneGas. MagneGas additionally represents and warrants to TALON that (a) it owns or has sufficient rights to
manufacture and sell the MagneGas Systems that will be supplied pursuant to this Agreement, (b) title to the MagneGas Systems will
be conveyed to TALON free and clear of any liens or encumbrances, (c) it has sufficient manufacturing capacity and access to sufficient
quantities of raw materials and component parts, materials and ingredients to produce and provide the MagneGas Systems to which
it has committed hereunder, (d) each such MagneGas System is protected by patents issued by the US Patent and Trademark Office
(the “USPTO”) or is otherwise covered by patents pending with the USPTO, and to the best knowledge of MagneGas does
not infringe on the intellectual property of any third party in the United States; (e) such MagneGas Systems, at the time of shipment,
and for a period of one year thereafter, will conform in all material respects with the agreed-upon specifications for such MagneGas
Systems as set forth on Exhibit A and Exhibit B, respectively, (f) such MagneGas Systems shall be fit
for their intended purpose, reasonably safe for use in accordance with the instructions provided to TALON in writing, and free
from any defects in design or manufacturing, and (g) that as of the date hereof the use of the MagneGas Systems to make MagneGas
Fuel complies with the applicable laws and regulations of the United States and Florida, and that MagneGas has provided or made
available to TALON all third party reports received by it certifying or relating to such compliance or to the content of emissions
from the MagneGas Systems during the processing or manufacturing of MagneGas Fuel. MagneGas makes no representation as to the MagneGas
Systems’ compliance with the laws and regulations of any country other than the United States of America, and has not undertaken
to determine whether use of the MagneGas Systems in the Territory is compliant with local laws and regulations. MagneGas also provides
the specific warranties contained in Exhibit D hereto.


 






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8.4       Additional
Warranties of TALON. TALON additionally represents and warrants to MagneGas that neither TALON nor any of its representatives
will intentionally make any oral or written representations which vary materially from the specifications, warranties, or representations
by MagneGas with respect to the MagneGas Systems or the MagneGas Fuel as stated in packaging or written documentation provided
in writing by MagneGas to TALON relating to the MagneGas Systems or MagneGas Fuel. TALON acknowledges that TALON is solely responsible
for ensuring compliance with the laws of the Territory, including, but not limited to, all environmental laws and regulations and
all applicable laws and regulations at the federal, state and local levels in the Territory, during the initial installation of
the MagneGas Systems in Talon’s facility for the manufacture of the MagneGas Fuel. TALON further warrants and covenants that
it will not reverse engineer, grant access to the MagneGas Systems to third parties for the purpose of reverse engineering, or
otherwise misappropriate the MagneGas Systems technology. TALON acknowledges that the foregoing covenant is particularly important
to MagneGas and that MagneGas is relying on this covenant and on the confidentiality provisions of Section 12 hereof
in order to enter into this Agreement. TALON will further promptly notify MagneGas if and when it becomes aware of any apparent
infringement of the MagneGas technology in the Territory.


 


8.5       Disclaimer
of Additional Warranties. EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER. PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES TO THE
OTHER, AND ALL SUCH OTHER WARRANTIES, EXPRESS OR IMPLIED, ARE HEREBY DISCLAIMED.


 


8.6       Warranty
Remedies. IN THE EVENT OF ANY BREACH OF ANY OF THE MAGNEGAS SYSTEMS WARRANTIES CONTAINED HEREIN, TALON MAY REQUIRE THE REPAIR
OR REPLACEMENT OF THE DEFECTIVE MAGNEGAS SYSTEM OR PART, OR RETURN OF THE PRICE PAID BY TALON.


 






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9.       LIMITED
PURCHASE OF GAS. MagneGas agrees for a period of 48 months after delivery and
commissioning of the MagneGas Systems, but no more than
30 days after delivery thereof, that if TALON wants to sell its gas to MagneGas while building the market for MagneGas in the Territory,
TALON will agree to do so at a delivered-to-Magnegas price of $0.36/cubic ft. Additionally, the gas will have to be delivered within
MagneGas’s specifications and in cylinders or containers that conform to US DOT standards and regulations. The parties may
agree to extend the buyback program upon mutually acceptable terms. This paragraph extends to TALON customers (or customers of
a designated Talon subsidiary) who buy MagneGas equipment from TALON.


 


10.       LIMITATIONS
OF LIABILITY


 


10.1       Limitation
on Certain Damages. IN NO EVENT SHALL A PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT, PUNITIVE, OR.
CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING, WITHOUT LIMITATION, LOST PROFITS, BUSINESS, OR GOODWILL) IN CONNECTION WITH THE MAGNEGAS
SYSTEMS, THE MAGNEGAS FUEL OR ANY OTHER MATTER COVERED BY THIS AGREEMENT, REGARDLESS OF WHETHER SUCH LIABILITY IS BASED ON BREACH
OF CONTRACT, TORT, STRICT LIABILITY, BREACH OF WARRANTY, OR ANY OTHER THEORY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES. THE FOREGOING LIMITATION OF LIABILITY REFLECTS A DELIBERATE AND BARGAINED FOR ALLOCATION OP RISKS BETWEEN TALON
AND MAGNEGAS AND IS INTENDED TO BE INDEPENDENT OF ANY EXCLUSIVE REMEDIES AVAILABLE UNDER THIS AGREEMENT, INCLUDING ANY FAILURE
OF SUCH REMEDIES TO ACHIEVE THEIR ESSENTIAL PURPOSE.


 


10.2       THE
TOTAL LIABILITY OF MAGNEGAS FOR ANY AND ALL LOSSES AND DAMAGES ARISING OUT OF ANY CAUSE WHATSOEVER (WHETHER SUCH CAUSE BE BASED
IN CONTRACT, NEGLIGENCE, STRICT LIABILITY, OTHER TORT OR OTHERWISE) SHALL BE LIMITED TO ACTUAL OUT-OF-POCKET DAMAGES, INCLUDING
BUT NOT LIMITED TO GOVERNMENTAL FINES, AND IN NO EVENT EXCEED THE PURCHASE PRICE (INCLUDING ROYALTIES PAID, IF ANY) OF THE MAGNEGAS
SYSTEM IN RESPECT TO WHICH SUCH CAUSE ARISES. IN THE EVENT THAT THE LIABILITY FOR LOSS AND/OR DAMAGE ARISES IN CONNECTION WITH
THE MALFUNCTION OF A MAGNEGAS SYSTEMS OR PART THEREOF, AT MAGNEGAS’s OPTION, MAGNEGAS MAY INSTEAD REPAIR OR REPLACE SUCH
PRODUCTS, BUT IN NO EVENT SHALL MAGNEGAS BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES RESULTING FROM ANY PRODUCT
DEFECT.


 


10.3       
IN THE EVENT OF A TERMINATION OF THIS AGREEMENT BY MAGNEGAS DUE TO A FORCE MAJEURE EVENT AS SET OUT IN SECTION 13.1, MAGNEGAS’
SOLE OBLIGATION HEREUNDER AND TALON’S SOLE REMEDY SHALL BE THE RETURN OF THE PURCHASE PRICE.


 


10.4       
Essential Part of the Bargain. The Parties acknowledge that the limitations of liability set forth in this Article
10 are an essential element of this Agreement between the Parties, and that the Parties would not have entered into this
Agreement but for such limitations of liability.


 






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11.       INDEMNIFICATION


 


11.1       Indemnification
by MagneGas. MagneGas shall defend and/or settle any and all third party claims, suits, and actions asserted against TALON,
its Affiliates, or their respective employees, officers, directors, managers, shareholders, members, agents, Affiliates, successors,
and assigns (each, a “TALON Indemnified Party”), to the extent such claims, suits or actions arise from or are
based on (i) any breach by MagneGas of any of its representations, or warranties set forth in Article 8 or (ii) an
actual or alleged claim of infringement or misappropriation of a patent, copyright, trademark or trade secret of any third party
in connection with TALON’s use of the MagneGas Systems. All settlements under this Section 11.1 shall be subject
to discussion with TALON and shall require the prior written consent of both Parties. TALON (and the applicable TALON Indemnified
Parties) shall at all times have the option, at its own expense, to participate in the defense or settlement of the claim, suit,
or action (including, without limitation, through counsel of its own selection). In addition, MagneGas shall indemnify and hold
harmless the TALON Indemnified Parties from and against any and all Losses suffered or incurred by any of them in connection with
any such claims, suits, or actions.


 


11.2       Indemnification
by TALON. TALON shall defend and/or settle any and all third party claims, suits, and actions asserted against MagneGas, its
Affiliates, or their respective its employees, officers, directors, managers, shareholders, members, agents, Affiliates, successors,
and assigns (each, a “MagneGas Indemnified Party”), to the extent such claims, suits or actions arise from or
are based on any breach by TALON of any of its representations or warranties set forth in Article 8 or any material
modification of the MagneGas Systems not approved by MagneGas. All settlements under this Section 11.2 shall be subject
to discussion with MagneGas and shall require the prior written consent of both Parties. MagneGas (and the applicable MagneGas
Indemnified Parties) shall at all times have the option, at its own expense, to participate in the defense or settlement of the
claim, suit, or action (including, without limitation, through counsel of its own selection). In addition, TALON shall indemnify
and hold harmless the MagneGas Indemnified Parties from and against any and all Losses suffered or incurred by any of them in connection
with any such claims, suits, or actions.


 


12.       CONFIDENTIALITY


 


12.1       Confidential
Information. As used in this Agreement, “Confidential Information” means any material or information disclosed
by either Party to the other Party, in writing, orally or by inspection of tangible objects (including, without limitation, material
or information relating to such Party’s research, development, customers, prospective customers, markets, finances, or other
business interests or trade secrets), which is designated in writing as “Confidential,” “Proprietary”
or some similar designation.


 






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12.2       Confidentiality
and Non-Use. Each Party shall treat as confidential all Confidential Information of the other Party, shall not use such Confidential
Information except to exercise its rights and perform its obligations under this Agreement, and shall not disclose such Confidential
Information to any third party, except to its attorneys and other advisors provided that such third party agrees in writing to
abide by restrictions on confidentiality and non-use that are substantially the same as those set forth herein. Without limiting
the foregoing, each Party shall use at least the same degree of care it uses to prevent the disclosure of its own confidential
information of like importance, which care shall be no less than reasonable care, to prevent the disclosure of Confidential Information
of the other Party. Each Party will promptly notify the other Party of any actual or suspected misuse or unauthorized disclosure
of the other Party’s Confidential Information.


 


12.3       Exceptions.
The provisions of this Article 12 shall not apply to material or information that: (a) was in the public domain at
the time it was disclosed or has become in the public domain through no fault of the receiving Party; (b) was known to the receiving
Party, without restriction, at the time of disclosure (other than through a disclosure to the receiving Party by the disclosing
Party prior to the Effective Date), as demonstrated by documentation in existence at the time of disclosure; (c) is disclosed with
the prior written approval of the disclosing Party; (d) was independently developed by the receiving Party without use of any Confidential
Information of the disclosing Party; (e) becomes known to the receiving Party, without restriction, from a third party not bound
by an obligation of confidentiality; or (f) is disclosed generally to third parties by the disclosing Party without restrictions
similar to those contained in this Article 12. In addition, the receiving Party may disclose the other Party’s
Confidential Information to the extent such disclosure is required by law or by order or requirement of a court, administrative
agency, or other governmental body, provided that the receiving Party provides prompt notice thereof to the disclosing Party so
as to afford the disclosing Party reasonable opportunity to seek a protective order or otherwise prevent or restrict such disclosure.


 


12.4       Confidentiality
of Agreement. The terms and conditions of this Agreement, but not its existence, shall be treated as Confidential Information
of each Party. Upon the advance written consent of both Parties, not to be unreasonably withheld, the Parties may elect to issue
press releases or other forms of publicity regarding the specific terms and conditions of this Agreement or regarding the business
relationship under this Agreement.


 


13.       GENERAL
PROVISIONS


 


13.1       Force
Majeure. Neither Party shall be considered in default of its performance of any obligation hereunder (other than an obligation
to make any payment due hereunder) to the extent that performance of such obligation is prevented or delayed by any act of God
or other cause beyond such Party’s reasonable control, including, without limitation, any act, failure to act, or delay in
acting on the part of any governmental authority (including the imposition of regulations which would prohibit the sale or manufacture
of the MagneGas Systems or of MagneGas Fuel or which would require additional research and development and with which a Party would
be unable to comply within a reasonable time); strikes or other labor difficulties; accidents or disruptions such as fire, explosion,
terrorism, flood, epidemics, unanticipated breakdown, failure, or delay of third party essential machinery or telecommunications
services, or civil disturbance (each, a “Force Majeure Event”). If any Force Majeure Event does arise, occur,
or result, the Party subject thereto shall use commercially reasonable efforts to minimize the consequences of such Force Majeure
Event and to overcome such Force Majeure Event as soon as reasonably possible. A Party desiring to rely upon any Force Majeure
Event as an excuse for failure, default, or delay in performance shall provide the other Party with a written description of the
facts giving rise to said event when it arises and statement claiming Force Majeure giving rise to suspension of the Parties’
obligation hereunder during the pendency of such conditions of Force Majeure. If such Party is not able to perform within ninety
(90) days after the event giving rise to the excuse of Force Majeure, the other Party may terminate this Agreement.


 






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13.2       Assignment;
Binding Effect. TALON may assign its rights under this Agreement to a wholly owned subsidiary that will operate the business
of the sale and distribution of the MagneGas, as permitted under the Licensing and Distribution Agreement. Such entity must either
be wholly owned by TALON or by all of the current shareholders of TALON, or a combination thereof. Except as set forth in the preceding
sentence, neither Party may, assign, delegate, or otherwise transfer this Agreement, or any of its rights or obligations hereunder
without the prior written consent of the other Party, and any such assignment, delegation, or transfer shall be null and void.
Subject to the foregoing, all of the terms and conditions of this Agreement shall be binding upon and shall inure to the benefit
of the Parties and their respective successors and assigns.


 


13.3       No
Rights In Third Parties. Nothing in this Agreement will confer any rights upon any person other than the Parties and their
respective successors and assigns.


 


13.4       Choice
of Law: Jurisdiction. This Agreement and its subject matter shall be governed by and interpreted in accordance with the laws
of the State of Florida, without reference to any principles governing conflicts of law that might cause the laws of any other
jurisdiction to apply. Each party accepts the venue provisions of this Section 13.4 and waives its right to any other
forum to which it may otherwise be entitled by virtue of its nationality or place of residence.


 


13.5       Legal
Fees. If either Party brings an action against the other Party in order to enforce the terms and conditions of this Agreement,
the non-prevailing Party in such action shall pay all reasonable costs and expenses (including attorneys’ fees) incurred
by the prevailing party.


 


13.6       Notices.
All notices required under this Agreement shall be deemed effective upon receipt and shall be (a) delivered personally, (b) sent
via overnight delivery using a nationally recognized courier service (e.g., UPS or FedEx), to the Party to be notified, at the
address(es) for such Party set forth below, or at such address(es) of which such Party has provided notice in accordance with the
provisions hereof, as follows:


 






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	To MagneGas:	MagneGas Corporation
	 	11885 44th St. North
	 	Clearwater, FL 33762
	 	Attn: Ermanno Santilli, CEO
	 	 
	with a copy to:	Shutts & Bowen LLP
	 	4301 W. Boy Scout Blvd., Suite 300
	 	Tampa, FL 33607
	 	Attn: Olga M. Pina, Esq.
	 	 
	To TALON:	Talon Ventures and Consulting GmbH
	 	Stadtweg 7
	 	D-30966 Hemmingen, Germany
	 	Attn: Matthias Mueller, CEO
	 	 
	with a copy to:	Wollmann & Partner
	 	Meinekestr. 22
	 	D-10719 Berlin
	 	Attn: Benjamin Bernhard




 





13.7       Entire
Agreement; Amendments. This Agreement, including any Exhibits and Schedules hereto, sets forth the entire agreement and understanding
of the Parties with respect to its subject matter. All prior and contemporaneous agreements and understandings between the Parties,
whether oral or written, are hereby superseded in their entirety by this Agreement. This Agreement may be amended, modified, or
supplemented only by a written instrument duly executed by each of the Parties.


 


13.8       No
Waivers. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition herein
will not constitute a waiver of that right or excuse any subsequent nonperformance of any such term or condition, or of any other
term or condition, by the other Party.


 


13.9       Severability.
If any provision of this Agreement is held invalid, illegal, or unenforceable, such provision shall be modified to reflect the
fullest legal and enforceable expression of the intent of the Parties or, if not possible, severed, and the remainder of this Agreement
will not be affected thereby. Notwithstanding the foregoing, the limitations of liability in Article 11 and the indemnification
provisions in Article 12 are considered by the Parties to be integral to this Agreement and may not be modified or
severed from this Agreement.


 


13.10       Interpretation.
The Section, Article, and Exhibit headings contained in this Agreement are for reference purposes only, and shall not control or
affect the construction of this Agreement or the Interpretation thereof in any respect. Unless otherwise expressly indicated, all
references to Sections, Articles, and Exhibits are to the Sections, Articles, Exhibits and Schedules of this Agreement.


  


13.11       Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be binding as of the Effective Date, and all of
which shall constitute one and the same instrument. Each such copy shall be deemed an original, and it shall not be necessary in
making proof of his Agreement to produce or account for more than one such counterpart. Facsimile or electronically scanned copies
will be given the same force and effect as original documents.


 


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IN WITNESS WHEREOF, the Parties, by their
duly appointed officers, have entered into this Agreement on the Effective Date.


 





	 	MAGNEGAS CORPORATION	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	Name:  	Ermanno Santilli	 
	 	Title:	President and CEO	 
	 	Date:	December 16th, 2016	 
	 	 	 	 
	 	 	 	 


 


	 	TALON VENTURES & CONSULTING GMBH	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	Name:  	Matthias Mueller	 
	 	Title:	Chief Executive Officer	 
	 	Date:	December 16th, 2016	 


 






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